Contents01 Introduction02 Relevant in a changing marketplace04 Transforming technologies06 Strengthening our integrated offer08 Delivering innovative solutions10 Case studies13 Financial highlights14 Chairman’s statement16 Chief Executive Officer’s review18 Logicalis today20 International operations22 Corporate social responsibility24 Board of Directors26 Financial overview28 Financial results29 Our subsidiaries
LogicalisAnnual Review 201101Today’s business world is in transition. Thereare rapid technological and market changeswhich are having a profound effect on business.As we emerge from the downturn we arefaced with a set of completely new demandsfrom customers.With the proliferation of new technologies,businesses are under increasing pressure tocontinually adapt to changing environments.Yesterday’s investments in technology arenot always meeting current business needs,so organisations need to rethink.At Logicalis, we no longer talk to businessesabout technology alone. We talk to them aboutwhat it does for their organisation’s future.Because it’s not business as usual!
LogicalisAnnual Review 201103 Marketplace relevance Be here, now How can we help your business today? The Internet has changed everything. Whether At Logicalis, we know that the post-financial- business leaders embrace it or not, every crisis world brings new opportunities and new organisation today is operating in a Web 2.0 world. challenges, too. For many businesses, success Some trends, after all, are impossible to ignore. in this volatile environment demands new strategies, The pressure to use less power and cooling, reduce new models and new technologies, because IT costs and meet environmental goals is spurring yesterday’s tools won’t help you grab the attention the uptake of virtualisation. The trend towards the of today’s customers. That’s why we focus provision of IT as a scalable, pay-per-use service on helping business and IT work together in to users is prompting businesses to move IT assets a ‘joined-up’ approach that aims to create shared, to the cloud. The need to reach better business sustainable and personal value – comprehensive decisions faster is triggering investment in advanced value. When CEOs and CIOs speak the same communication and collaboration technologies. And language, the effects can be powerful, creating the value of establishing more meaningful, two-way businesses that are more agile, more responsive conversations with customers is seeing companies and more competitive. We see it every day. flock to social networking sites. The landscape is shifting. At Logicalis, we can help you confidently navigate your own path, at your own pace. As a business relevant we have to be in a changing marketplace Strategic objectives • Make the most of opportunities offered by economic recovery • Invest in innovation for competitive advantage • Get IT and the business working as one • Embrace the latest technology trends with confidence
LogicalisAnnual Review 201104 Strategic objectives • Give employees the tools they need to get work done • Transform corporate IT resources into always-on services • Address data security issues with confidence Transfor
LogicalisAnnual Review 201105ming technologies for tomorrow’s organisations Consumer-driven technology platforms Data centre for instant information Virtualisation is the first step to turning corporate Today’s employees like to shop around. The tools IT resources into always-on services for employees they use to get their jobs done are increasingly to use regardless of location or the device a matter of personal choice – so they’re bringing they’re using. their own smartphones, laptops and tablets to work and using them to access cloud-based services. Public cloud Today’s forward-thinking employer doesn’t stand Scalable computing services available on a pay-per- in their way. By supporting these devices and use basis transform IT costs from upfront capital placing corporate data and applications in public expenditure to predictable operating expenses. and private cloud infrastructures, bosses know that employees will get more done – whether they’re Private cloud in the office, at home or meeting with customers. All of cloud’s advantages of reduced cost and This consumerisation of corporate computing elastic scalability, but from within your own data transforms IT from a support function to a value centre and according to your own rules on creator. We’re here to help your business make information governance. There is an emerging view that step. that a combination of the two, i.e. a hybrid cloud, is the way forward for many organisations. Software-as-a-Service Hosted applications that provide up-to-the-minute functionality on a subscription basis, but place the burden of ongoing management in the hands of third-party specialists. Security issues One of the biggest concerns about both mobile devices and cloud computing, but one that your organisation can confidently address with expert help.
LogicalisAnnual Review 201107 Strategic objectives • Move away from yesterday’s technology silos • Embrace the sophistication provided by multi-vendor, multi-technology stacks • Rely on the help of proven experts to create and support new integrated solutionsintegrated Strengthening our offer Expanding our offer to meet changing Working together with you expectations At Logicalis, we can support customers’ ICT The world doesn’t stand still and neither does solutions with full life-cycle management – from a business’s ICT needs. At many companies, planning, design, implementation and integration yesterday’s technology investments have created to support, management and optimisation. a legacy of technology silos that are costly to maintain, burdensome to manage and hard to In particular, our extensive portfolio of managed integrate – when what businesses really need is a and hosted managed services includes intelligent stable, streamlined and seamless IT environment remote monitoring, operational management, that brings together new and existing technologies co-location and full or partial outsourced partnering. in exciting, value-creating combinations. This allows our clients to take advantage of the latest technologies in the way that suits them Some of the most exciting new technologies – best, picking and choosing from a menu of service from sophisticated business analytics to advanced options, to create the right blend of internal and communication and collaboration solutions and external resources. slick multimedia delivery on demand – rely on multi-vendor, multi-technology stacks, which is why Logicalis’ clients worldwide rely on our passion for convergence and our long-established data centre skills to get these solutions working together on their behalf.
Logicalis Annual Review 2011 09 solutionsinnovative across public and private sectors Dare to imagine, dare to innovate Breaking down the barriers Leading companies do things differently. They think Logicalis has built its business on helping its differently. They implement technology differently. customers use technology to find creative new In other words, they innovate. Without innovation, ways to address their challenges. If storing vital your business can never be a leader – just a business records and data is a struggle, we can follower. At Logicalis, we believe that the precursor help. If geographical distances between colleagues to innovation is creative thinking. That’s why we’re slow down decision times, we can help. If your IT here to help you stretch your imagination. What team could be better deployed on strategic tasks constraints does your business currently face? that add real value, we can help. If your data centre How could it serve its customers better? What new space is costly and cramped, we can help. We products and services would you like to launch? measure our success by our customers’ success. Today’s technologies can do remarkable things. More importantly, they can enable businesses like yours to achieve remarkable results. Go on. Dare to imagine!
Case studiesLogicalisAnnual Review 201110 Logicalis is delivering ICT solutions and services to over 5,000 customers around the globe. Loughborough University Singapore Telecommunications Ltd A new hybrid cloud solution PowerON is SingTel’s end-to-end suite implemented at Loughborough of cloud-based services covering University mitigates massive cost of PowerON Connectivity, PowerON data centre rebuild, and connects the Infrastructure, PowerON Applications university to Logicalis UK’s hosted and PowerON Managed Services. cloud service, the first of its kind It provides businesses with an ‘Intelligent Utility’, providing connected to JANET (the UK’s instant, low-cost, scalable and secure IT resources on demand. education and research network). SingTel PowerON Compute, enabled by VMware vCloud Loughborough University, one of the UK’s leading Datacentre Service and part of PowerON Infrastructure, universities, and its premier university for sport, needed is an Enterprise-Class Cloud that provides all businesses to replace its 40-year-old data centre which was running with virtual computing needs on demand. With networking with limited capacity and was badly in need of replacement. by Cisco and storage by EMC, it is the most reliable and Logicalis was chosen for its Managed Private Cloud (MPC), secure cloud platform built for enterprises. cooperative cloud offering and for its direct connection from its Cloud Service to JANET. The university now has a data Logicalis Singapore was chosen as SingTel’s Master Service centre service that is modular, economical, green, and Agreement (MSA) partner for PowerON Compute Go-To- fully resilient at the local level, with the option of hosting Market (GTM) strategy. The Cloud GTM will add an additional services remotely at Logicalis’ data centre, and this has services portfolio to Logicalis’ current partnership with enabled Loughborough to avoid the need for a multi-million SingTel as the MSA for Customer Premise Equipment (CPE) pound refurbishment project. ‘MPC, the cooperative cloud and Managed Services. and Logicalis’ unique virtual container capability lets you move services from local to remote and back again without ‘We can always trust Logicalis to go the extra mile to deliver buying in more infrastructure’, says Dr Phil Richards, the services. Also, we are able to leverage on their skill set Loughborough’s IT Director. and networking resources to complement our cloud services and applications which will bring greater value to all end users,’ said Alvin Kok, Head of Infocomm Services, SingTel.
LogicalisAnnual Review 201111 Watts Water Technologies, Inc. Itaú Bank Logicalis delivers Managed Services to The client – one of the biggest private Watts Water Technologies, Inc., a world banks in Brazil – needed to reduce the leader in the manufacture of innovative time and expenditure for executives’ products to control the efficiency, safety travel within and outside the country and quality of water within residential, to visit its subsidiaries and customers. commercial and institutional applications. For that, it needed to improve and expand its video conferencing rooms. PromonLogicalis’ collaboration solution With demands from users increasing and budgets tightening, was chosen to update and add realism to the meetings. Watts’ Director of Global IT Shared Services, Ty Muscat, PromonLogicalis has since deployed 23 telepresence rooms, turned to Logicalis for managed services. This was the more than 5,000 IP phones, network and data centre catalyst for a new dimension in the relationship between equipment and consulting services for the Itaú Group in Watts and Logicalis which has increasingly shifted system Brazil. Itaú has nearly 5,000 offices across the Americas, management responsibilities to Logicalis and freed the Europe and Asia. It intends to acquire this solution for all Watts IT team to focus on core competencies that support international sites, and believes that unified communications and advance its business objectives. is strategic to national and international expansion. The communication solution, which combines audio and video Through the years, Watts has worked on many projects on the Internet network (IP), provides a realistic experience with Logicalis. Muscat says, ‘Logicalis has consistently to virtual meetings, and thus, leads to greater productivity, distinguished itself by its willingness to work with my team reduced travel costs and only minor disruption to executives. to develop solutions that add value and fit our needs as a customer. Each project has been a joint effort that we Outside Brazil, Logicalis has also recently implemented implement together as a team and support as a team – a project in Buenos Aires to upgrade its Cisco Call Manager with Logicalis taking on some responsibility and Watts taking and Unified Computing System (UCS) and to provide on some responsibility. There is tremendous flexibility in the virtualised support, as well as in the US. range of services Logicalis can offer.’
LogicalisAnnual Review 201112Excellent operationalmanagement and increasingbusiness and geographicaldiversification has pushedrevenues and EBITDA upby 25% and 26% respectively.EBITDA and operating profitmargins remained steady asexpected, and are planned toexpand next year.
Financial highlightsLogicalisAnnual Review 201113 + 25 26 Total sales $1.05 billion % + EBITDA $53.3 million % 2010: $840 million 2010: $42.2 million + 21 % + Annuity service revenues $142.2 million 26 Operating profit $31.6 million % 2010: $117.5 million 2010: $25.0 million FY 2011 Achievements FY 2012 Objectives Increased sales, EBITDA and Increase revenues and profitability operating profit Increase services portfolio, including Invested in three data centres cloud-based services and cloud-based services Seek further suitable acquisition targets Three acquisitions (Europe, US and Asia Pacific)
Chairman’s statementLogicalisAnnual Review 201114 “As our services initiatives develop around our data centre operations, this, coupled with a sustained market recovery, should accelerate our profit growth.” I am delighted to report on a year in which Logicalis delivered a strong performance, accounting for 22% of the Datatec Group’s revenues and 34% of EBITDA. The marked improvement in demand in the first half of the financial year continued into the second half, with all regions enjoying revenue growth. In particular, the strong recovery in the US reported in the first half continued during the year, with the US region enjoying double-digit growth in the second half. Growth for the year was particularly strong in the South America region, driven by increased capital investment by telecommunication service providers, with Brazil once again the stand-out market. The performance of the Asia Pacific region was also very encouraging with good margins from an enhanced services mix. Despite a weak recovery and difficult trading conditions in the UK, Logicalis’ operations are performing well. During the financial year, Logicalis completed three acquisitions. In September 2010, it acquired the business of Touchbase Singapore from Touchbase Group. Touchbase Singapore has annualised revenues of approximately $6 million and is a unified communications (UC) solutions provider focusing in the areas of UC and customer contact centre solutions for enterprise and multinational corporations.
LogicalisAnnual Review 201115 In December 2010, Logicalis acquired Network Market prospects The Logicalis Group Infrastructure Corporation (NIC), a Phoenix, The gradual recovery in global markets and the is a division of Arizona-based Cisco Gold Partner with annualised growth in networking-dependent cloud computing Datatec Limited, revenues of approximately $20 million. NIC is providing a strong underpin to our industry. We listed on the provides network consulting and IT services to expect all our operations to deliver good profitable Johannesburg and the education, state and local government, gaming growth this year and contribute towards overall London AIM Stock and hospitality markets across the Southwest margin expansion through operational leverage. Exchanges, with United States. This acquisition expands Logicalis’ annualised revenues presence in this region, reinforces its strategic The US may still provide the best relative upside of approximately relationship with Cisco and extends its expertise as businesses continue to invest and industries $5 billion. into educational markets within which Logicalis such as manufacturing go through something previously had limited exposure. of a renaissance assisted by the weak dollar, even if consumer demand remains weak. As our In February 2011, Logicalis acquired Direct Visual, services initiatives develop around our data centre a UK-based Tandberg (now part of Cisco) Platinum operations, this, coupled with a sustained market Partner with annualised revenues of approximately recovery, should accelerate our profit growth. $15 million. Direct Visual is one of the UK’s leading independent suppliers of video communications Jens Montanana solutions and video managed services and is being Chairman integrated into Logicalis’ Unified Communications and Collaboration (UCC) operation to strengthen its video offering and further broaden its managed services and cloud computing expertise. Market backdrop We remain positive on current trading and more optimistic about the longer term, despite the many unsettling events in the world so far this year. Corporate earnings, especially in the technology sector which tends to benefit from dollar weakness, have remained strong. The US is continuing its slow broad-based recovery, albeit the consumer is still struggling, and there have also been some fragile global indicators of late. While Latin America and Asia remain the most vibrant markets, we detect that global growth is becoming more aligned. We see our industry continuing to benefit from advances in computing that require continuous networked communications.
Chief Executive Officer’s reviewLogicalisAnnual Review 201116 “Logicalis is a new breed of business-enabling technology solutions provider.” I am pleased to report that Logicalis had a strong fiscal year with increased revenues and improved margins. Following one of the toughest downturns in recent time, our focus on customer needs and remaining vigilant to economic changes placed us in an ideal position to move forward quickly as market environments improved. Our markets are different; one size does not fit all. We operate in 19 countries with different growth rates, cultures, and ethnic and linguistic contrasts. Our corporate philosophy of empowering local management teams to create innovative solutions for their own markets, under a single Logicalis banner, and then replicating those solutions in other markets has proved successful. I would like to thank all of our employees in all countries for their hard work and commitment in achieving these results. I would also like to extend a special thank you to all our customers, partners and stakeholders whose support we greatly value.
LogicalisAnnual Review 201117 Group highlights Our expertise in Cloud and XaaS services gives us The common theme • Revenues up 25% to $1.05 billion with organic the platform to provide specific business solutions that runs through growth of 15% such as this. our operations is • Product revenues up 26%, service revenues customer service of up 20% Information technology has its own language, the highest order. • Annuity service revenues up 21% but in a world where the possibility of what IT can • Gross margins improved to 23% do and the value that IT can bring is ever more • EBITDA up 26% to $53.3 million fundamental to the delivery of business outcomes, (FY 2010: $42.2 million) we must continue to bring the language of business • Asia Pacific region contributed 8% of revenues and technology together. • Invested in three data centres and cloud-based services As we look to the future we can expect to benefit • Acquisitions completed during FY 2011: from our investments in data centres and the Touchbase (Singapore) increasing focus on cloud-based services. We 20 September 2010 will continue to manage for improved operational Network Infrastructure Corporation (US) leverage and will remain focused on developing 1 December 2010 our services portfolio. In addition, we will continue to seek out suitable acquisition targets. Direct Visual (UK) 1 February 2011 Logicalis is a new breed of business-enabling technology solutions provider. Our mission is to The common theme that runs through our enable our customers to empower their business operations is customer service of the highest order. through technology with a cost and operational Service on every level, whether undertaking the model that best meets their needs. most complex IT outsourcing and Cloud service, expediting an accounts query or delivering Our mission is to create equilibrium between the technology hardware must be at the forefront business outcomes of our customers and their of all our customer relationships. investments and understanding of technology. In this way we will continue to remain relevant to our We enjoy extremely good relationships with our customers and our partners. global technology partners and work closely with them to provide solutions that combine their Ian Cook technologies with our services. This enables us Chief Executive Officer to become increasingly more relevant to our customers’ businesses. Our Cloud services are designed to assist organisations with their objectives, not just in computing terms but in real business terms. For example, the Logicalis analytics solution provides businesses with planning, consolidation and business intelligence tools in a corporate performance management suite, enabling senior-level executives to more effectively manage their organisation’s performance.
Logicalis todayLogicalisAnnual Review 201118Collaboration across our marketsWith over 60 offices around the globe and more than 2,000 employees, Logicalis isproud of the wealth of skills and expertise it has to offer. Our organisational structureenables us to work together closely, pooling our talents and experience to developnew and innovative solutions. The technologies we use internally make it easy for ouremployees to identify colleagues with specific expertise in other parts of the world,to support multinational sales opportunities, and to share customer references andrelevant industry sector knowledge, leading to a better understanding of our clientsand the sectors and geographies in which they operate.ResponsivenessWhether the issue at hand is a joint marketingopportunity or a customer request, our localaccount managers can quickly locatecolleagues anywhere else in the world,ensuring speedy response times andfaster decisions. More innovation ‘Two heads are better than one.’ That’s the principle that guides our sales and marketing personnel, so that local marketing programmes and initiatives around the world are fed by the same shared creative spark. Our business Our business Communications and Collaboration Data Centre and Cloud Solutions Logicalis is a recognised leader in the design, implementation Logicalis’ expertise in Data Centre solutions helps and support of highly integrated Communications and organisations operate their data centres at peak efficiency, Collaboration solutions, with best-in-class products from minimal cost and maximum effectiveness, and provides the Cisco, IBM, Microsoft, Tandberg (now part of Cisco) and environmental benefits required today. other leading vendors. • Virtualisation and Consolidation • Voice and IP Telephony • Enterprise Computing • Network Infrastructure • Cloud Services • Contact Centre • Storage • Messaging • Hosting • Presence • Switching • Rich Media Conferencing • Security • Collaborative Content/Web 2.0 • Video • Security
Logicalis Our officesAnnual Review 201119 Europe North America South America Asia Pacific UK Tempe (Arizona) Brazil Australia Cardiff Irvine, San Diego (California) Barueri Brisbane Elland Shelton (Connecticut) Belo Horizonte Melbourne Livingston Atlanta (Georgia) Brasília Sydney London Lisle (Illinois) Manaus China Slough (HQ) Indianapolis (Indiana) Rio de Janeiro ChongQin Warrington Waltham (Massachusetts) São Paulo Shanghai Farmington Hills,Resource sharing Germany Berlin Cologne Commerce Twp. (Michigan) Minneapolis (Minnesota) Argentina Buenos Aires Córdoba Suzhou Xiamen Bridgewater (New Jersey) Hong KongOur Managed Service operations around the New York (New York) Rosário Hong Kongworld are adept at sharing best practice and Charlotte and Raleigh Boliviacreating operational efficiencies that lead to (North Carolina) Malaysia Santa Cruz West Chester, Dublin (Ohio) Cyberjayalower costs for customers. de la Sierra Houston, Plano, Kuala Lumpur San Antonio (Texas) Chile Singapore Bellevue (Washington) Santiago Singapore Green Bay, Brookfield Colombia (Wisconsin) Taiwan Bogotá Hsinchu Ecuador Kaohsiung Quito Taichung Taipei Paraguay Asunción Managed Service Centres Peru Lima UK Argentina Slough Buenos Aires Uruguay Bracknell Montevideo Malaysia Cardiff Cyberjaya USA China West Chester Shanghai Phoenix Brazil São Paulo Efficiencies We use our own state-of-the-art telepresence and video conferencing facilities around the world to reduce our travel costs but still reap the benefits of ‘face-to-face’ contact. Time to market New innovations conceived in our local centres of excellence – such as our UK and US Cooperative Cloud Solutions teams Our business – are quickly disseminated, enabling local market operations to rapidly bring their own Professional and Managed Services offerings to market. Logicalis’ experienced and certified specialists deliver a portfolio of full life-cycle services, backed by comprehensive Managed Services expertise. These encompass the voice and data infrastructure (fixed and mobile), data centre, hybrid public and private Cloud, and applications found in today’s enterprise ICT environments. • Consulting • Application Integration and Development • Managed Services • Remote Monitoring and Management • Hosting • Co-location • Managed Infrastructure Services • Business Analytics • Security
International operationsLogicalisAnnual Review 201120 North America South America Headcount / 540 Headcount / 730 Customers / 2,280 Customers / 840 Group revenue / 34% Group revenue / 28% Headquartered in Farmington Hills, Michigan, Logicalis US Logicalis’ South American operation has its main offices has more than 20 regional offices and over 500 employees in São Paulo (Brazil) and Buenos Aires (Argentina) and supporting the full spectrum of ICT solutions. employs over 700 staff. The company also has a local presence in Bolivia, Colombia, Chile, Ecuador, Paraguay, The company has a strong portfolio of communications and Peru and Uruguay. enterprise computing solutions which, when combined with industry-leading partnerships with Cisco, HP and IBM, The company is the largest independent integrator for Cisco provide customers with powerful choices and solutions. throughout the region and a major supplier to the leading Augmentation of its Enterprise Cloud Services offering telecoms providers. Logicalis South America will continue to has been a key focus. leverage its recognised expertise in data centre solutions and is rapidly developing its managed services capability across Today, over 30% of the company’s employees are engaged in the region. services roles applying their specialist expertise in Managed Services, Enterprise Cloud Services, Private Cloud Services, It has a strong services business employing over 40% of its Efficient Data Center/Virtualization/Consolidation Services, people in technical and consulting services roles. Unified Communications and Collaboration Services. Awards Awards • Logicalis won seven Cisco awards for the region, including • Cisco National Solution Innovation Partner of the Year a Cisco Global Award for Enterprise Partner of the Year • Cisco Powered Private Cloud designation • HP Solution Elite Partner • IBM Choice Award North American Excellence • IBM Beacon Award Outstanding Storage Solutions • IBM Beacon Award in the Outstanding Virtualization and Consolidation Solution Category
LogicalisAnnual Review 201121 Europe Asia Pacific Headcount / 540 Headcount / 380 Customers / 1,070 Customers / 815 Group revenue / 30% Group revenue / 8% Logicalis has its headquarters in Slough, UK with local offices Logicalis’ Asia Pacific region is now fully integrated into in the UK and Germany employing around 540 staff. The UK the Logicalis Group and trades under the Logicalis name. operation, with offices in Slough, London, Warrington, Cardiff, In September 2010, it acquired the business of Touchbase Livingston and Elland, has adopted a hybrid sales approach Singapore from Touchbase Group. Touchbase is a unified to delivering multi-vendor integrated solutions across IBM, communications (UC) solutions provider focusing in the areas Cisco, HP, Microsoft and other complementary technologies, of UC and customer contact centre solutions for enterprise and has a rich services offering with major investment in its and multinational corporations. This acquisition has further Managed Services and Data Centre Cloud facilities. built Logicalis’ presence in Asia Pacific, bringing important contact centre expertise. The business has been integrated With its headquarters in Cologne, Logicalis Germany has into Logicalis’ Singapore operation. a strong presence in both the North Rhein Westphalia (the largest economic area in Germany by GDP) and the Berlin The company has three main units centred in Australia, markets. The company is a Cisco Gold Partner and is very Singapore and Taiwan, with further operations in Malaysia, important strategically to Logicalis for its ability to target new Hong Kong and China, and a primary Network Operations business opportunities within the Eurozone. Centre in Malaysia, with the facilities to support the needs of multinational corporations and services companies across the Awards Asia Pacific region, including some of the largest IP networks • Logicalis UK won six Cisco awards, including a Cisco in Australia. Global award for Architectural Excellence Partner of the Year (Cloud Solutions) Awards • HP Data Centre Partner of the Year • Logicalis Australia won Cisco Virtualization Partner • HP Data Protector Partner of the Year of the Year
Corporate social responsibilityLogicalisAnnual Review 201122 Logicalis’ policy is to actively and enthusiastically support the welfare of its people, the environment and local communities wherever we have a presence. Our people Environment Logicalis aims to be an employer of choice: As a responsible international provider of ICT attracting, developing and retaining the best solutions, Logicalis seeks to measure and minimise people. We understand that knowledge is the key the way in which any of our commercial activities to success and we maintain good communications may impact the environment. We are also with employees through our information and committed to providing practical advice and consultation procedures. support to our customers and suppliers to help them along the path to ever cleaner and greener Our personnel practices ensure that every ICT solutions. employee, wherever they work, whatever their role, is treated equally, fairly and respectfully at all times. As an early adopter of the Green ICT ideas and Adherence to international health and safety activities, Logicalis recognises that a responsible standards ensures that our people are properly attitude to Green ICT can lead to significant protected and cared for, wherever they operate. reductions in energy consumption and carbon emissions. As well as reducing greenhouse gases Logicalis maintains consistent and transparent and operational costs, the technologies we diversity policies across all our markets. We firmly promote, such as remote working and video and believe that career opportunity, recognition and teleconferencing, enable more flexible working, reward should be determined by a person’s greater productivity and improved business capabilities and achievement, not their age, sex, continuity. Green ICT is good for the planet and race, religion or nationality. Wherever we operate, it’s good for business. Logicalis strives to maintain a workforce that reflects the skills, ethnicity and demographics Community of the local population. Logicalis encourages our operating companies in every territory to create initiatives that help improve Logicalis recognises that it is the ideas, skills the quality of life for their local communities. Here and capabilities of our people that drive our are just a few highlights. development and growth. In return, Logicalis will invest in whatever training and resources During the 2010 holiday season, Logicalis US our people need to ensure that they are able donated $35,000 to 35 charities in communities to develop and grow with us. where its employees work and live; each charity was nominated and selected by local employees Logicalis is committed to rewarding its shareholders in one of 12 geographical regions who also made through consistently producing above-average the cheque presentation. Their support made a big returns and growth. difference for community agencies ranging from food banks and homeless shelters to healthcare research and quality of family. In addition, the Logicalis US ‘Give Back to the Community’ programme allows each employee eight hours of work time each year to support charities of their choice; total volunteer hours in 2010 amounted to 2,349, and 6,771 since April 2008.
LogicalisAnnual Review 201123 Our core values Customer oriented – we listen to our Honest – we have a culture that is customers’ needs and focus on delivering based on integrity and openness. value to their organisations. Quality – we are professional in all Innovative – we attract spirited and our business dealings and dedicated creative employees who show heart to achieving, and maintaining the and conviction in all that they do. highest standards. Trusted – we consistently deliver on Empowerment – we foster a ‘can-do’ our promises. approach where helping our customers and colleagues is central to our job satisfaction. For the fifth year in succession, Logicalis UK made Another of the charities associated with the donations to the Berkshire Community Foundation programme is Ser Cidadão, which provides which provides grants to local voluntary groups to vocational education for adolescents and young support grassroots projects. These include young adults from poor communities. The association people with special needs, the disabled, the elderly has a 20-year history grounded in the activities and the homeless. developed by the Educação de Trabalho (Education for Work Program). Logicalis UK also sponsors Pump Aid, a charity that provides access to clean drinking water and safe, In Australia, Logicalis made a donation of adequate sanitation to those in need in Zimbabwe, AUS$5,000 towards the Queensland Flood Relief Malawi and Liberia. after the natural disaster in Brisbane. Logicalis Southern Cone in South America Local staff also participated in an activity to build participated for a second year in a recycling brand new bicycles for eight children in foster care. programme to support the Foundation of Garrahan Each child was presented with a helmet and Hospital in Argentina, which focuses on complex bicycle, which was assembled by Logicalis staff treatments for children. The programme consists (and checked over by a mechanic before the of office collections of disposable paper and plastic children were allowed to ride the bike!). For many cups, to be donated to the Foundation for its of the children, this was the first bike that they recycling. ever owned. Logicalis Southern Cone also contributed to local Logicalis Singapore has supported the SingTel community organisations that help children, such Touching Lives Fund by participating in its Charity as A.D.A.N.D and San José Providente; and made Golf tournament for seven years. The Touching a donation to EGB Nº98 School, which needed Lives Fund (TLF) is SingTel’s corporate philanthropy technological equipment to develop a project for programme that aims to provide disadvantaged the improvement of writing and reading skills. children and young persons with special needs or who are at risk, with learning opportunities and to In Brazil, PromonLogicalis continues to support improve their quality of life. The beneficiaries Junior Achievement, an organisation that teaches supported by the TLF in 2010 were APSN Chao children about work readiness and entrepreneurship. Yang School, APSN Tanglin School, AWWA Early The PromonLogicalis Volunteer Program, Years Centre – EIPIC, MINDS Lee Kong Chian established in 2009, provides education, work Gardens School, Students Care Service and the readiness, and social movements to children in Singapore Cancer Society. the communities of São Paulo and Rio de Janeiro, supported through the following charities: Ação Comunitária, Asylo João Evangelista, CAMP Vila Isabel, CCA Santa Teresa de Jesus, Gotas de Flor com Amor and Lar Escola Recanto Cristão.
Board of DirectorsLogicalisAnnual Review 201124 3 4 1 21. Jens Montanana 2. Ian Cook 3. Mark RogersChairman Chief Executive Officer Chief Operating OfficerJens is the founder and chief architect Ian Cook joined Logicalis as CEO, Mark Rogers joined Logicalis in 2003 asbehind Datatec, which he established in European Operations in 2003 and became Finance Director for Logicalis UK, and in1986, and also Chairman of Logicalis since CEO of Logicalis Group in March 2007. 2004 he became Chief Financial OfficerMarch 2007. Between 1989 and 1993, Since then, Logicalis has become an (CFO), European Operations. Since MarchJens served as Managing Director and international brand and a respected 2007, he has taken on the role of COO forVice-President of US Robotics (UK), a partner of the major technology vendors. Logicalis Group.wholly owned subsidiary of US Roboticswhich was acquired by 3Com. In 1993, he Ian has extensive experience in the Mark has extensive experience in theco-founded US start-up Xedia Corporation technology industry spanning more than technology and service sectors both in thein Boston, MA, an early pioneer of network 25 years. He joined Logicalis from Damovo UK and internationally. He spent 20 yearsswitching and one of the market leaders where he had extensive involvement in at Racal Electronics/Thales, of whichin IP bandwidth management, which was international operations as Chief Operating 13 years were at Finance Director levelsubsequently sold to Lucent Corporation. Officer (COO). within divisions providing ManagedIn 1994, Jens became Chairman and Network Services, Telecoms and Survey,Chief Executive Officer (CEO) of Datatec Prior to Damovo in 1990, Ian led the Board and Positioning Services. While atwhich listed on the Johannesburg Stock of Cablestream which became Siemens Thales he was also Chairman of CitylinkExchange in November 1994 and on the Network Systems Ltd (now Affiniti), one Telecommunications, a joint ventureAlternative Investment Market of the of the UK’s leading network integrators. company which had secured a £1.2 billion,London Stock Exchange in 2006. Jens Over a 10-year period at SNSL, he rose 20-year Private Finance Initiativeis Non-Executive Director of Versatile to Group Managing Director responsible contract with London Underground.Systems, Inc., a Toronto and London for operations across Europe. Previously, Also, he has significant mergers andlisted Canadian company. he was Sales and Marketing Director acquisitions (M&A) experience, including at Case Communications Ltd, a the sale of Racal Telecom to Global manufacturer of data communications Crossing for £1 billion as well as equipment with operations in the UK, experience in the acquisition and US and Asia Pacific. integration of smaller businesses. He started his finance career with Revlon where he qualified as a Chartered Management Accountant.
LogicalisAnnual Review 2011254. Nigel Drakeford-Lewis Ivan Dittrich Luiz Fernando T. RudgeChief Financial Officer Non-Executive Director Non-Executive Director Ivan is a Chartered Accountant and has been Luiz Rudge is CEO and a member of the Board ofNigel Drakeford-Lewis is a Fellow of the with Datatec for the past 10 years. He was Directors of Promon SA. Following the acquisitionInstitute of Chartered Accountants in appointed as Non-Executive Director to the by Logicalis of a majority stake in PromonEngland and Wales and also has an Logicalis Board on 22 April 2008, and later Tecnologia in May 2008, Luiz then becamehonours degree in Economics and became Datatec’s Group Finance Director on Non-Executive Director on the Logicalis Board. 1 May 2008. Previously, he was Group CorporateAccountancy from Exeter University. Director and Group Company Secretary of He joined Promon SA in 1982 and served asNigel joined Datatec in June 2000, initially Datatec for five years, as well as Corporate Treasurer (1987-1991), Finance Director (1991-to help build an advisory services division Finance Manager. Ivan successfully managed 2001), and CFO (2001-2010), when he waswhich was subsequently merged with the Group’s dual listing in London during 2006. elected to his current position. He led severalLogicalis. He then moved across to Prior to joining Datatec, Ivan worked for corporate finance deals on behalf of Promon, PricewaterhouseCoopers in London. including M&A transactions as well as financingLogicalis Group in November 2000 to arrangements to support Promon’s proprietaryfocus on the reshaping of Logicalis Group investments and its contracts with clients. Priorand help redefine its strategic direction. to joining Promon and in 1986/1987, Luiz wasSince April 2001, Nigel has been CFO engaged in foreign trade activities.of the Group with responsibility for the Luiz holds a BA degree in Business Administrationfinancial management and control of the from Fundação Getulio Vargas (FGV/São Paulo),operations across the Group. and he also completed the MA programme in Geography (Urban Development) of the UniversityAfter qualifying as a Chartered Accountant College/University of London and the Advanced Management Program of the Harvard Businesswith Grant Thornton, Nigel held senior School.financial positions with Black & Decker,Grand Metropolitan (now Diageo) andDixons Group. Prior to joining Datatec,Nigel worked for five years as a seniorconsultant with Arthur D Little onstrategy, corporate finance andperformance improvement assignments,primarily in the fixed and mobiletelecommunications sector.
Financial overviewLogicalisAnnual Review 201126Asia Pacific region increaseThe markets of Europe (which is Revenue geographical split % Revenue geographical split %mainly the UK), North America and 2010 2011South America are now roughly equalin size.The US remains the single largestmarket while Asia Pacific, addedthrough the acquisition of Netstar inthe prior year, is now just under 10%of the total.The increase in South America wasdriven by product sales, particularlyto telecommunications serviceproviders. North America 40% North America 34% South America 23% South America 28% UK 34% UK 28% Germany 2% Germany 2% Asia Pacific 1% Asia Pacific 8%Service mix steadyThere was almost no change to the Revenue segmental split % Revenue segmental split %product, professional services and 2010 2011annuity services mix in 2011.The stronger product sales in 2011should drive increased annuity sales,aided also by the new cloud-basedservices.Overall, as the volume of businesshas grown, margins and the servicesmix have, encouragingly, remainedvery stable.We are still targeting a 75/25%product versus services split in themedium term. Product 77% Product 78% Professional Services 9% Professional Services 9% Maintenance & Managed Services 14% Maintenance & Managed Services 13%
LogicalisAnnual Review 201127Cisco largest vendor partnerSimilarly, our vendor technology Revenue by vendor % Revenue by vendor %mix is relatively stable. 2010 2011Approximately half our productbusiness is networking related andthe other half comprises enterpriseand data centre computer andstorage systems and software.The big increase in networking productsales in South America boosted theCisco segment, which accounts forthe largest share of the mix.IBM is the next most significantvendor, followed by HP. IBM 31% IBM 30%The category ‘Others’ includes data Cisco 40% Cisco 48%storage vendors such as EMC, HP 18% HP 11%software from IBM and VMware, and Others 11% Others 11%security and system managementsolutions.Strong gross marginsStrong revenue growth and better Gross margin %margins in the US drove the overall 2010/2011improvement. 35.1In Asia and Brazil in particular, the 31.6increase in product sales and impact 28.1 28.7on mix lowered the overall margin 24.6 23.2 22.2 23.0percentage. 21.8 21.3 18.3 18.3Our geographical diversificationhas helped the consolidated grossmargins.The UK margins reflect its sales mixas well as the weaker conditions thatstill prevail in the UK market. UK Germany North America South America Asia Pacific TotalWe remain very pleased with the 2010balance of the overall business. 2011
Financial resultsLogicalisAnnual Review 201128Income statement – unaudited 2011 2010 US$m US$mRevenue 1,048.0 839.5Cost of sales (807.6) (653.6)Gross profit 240.4 185.9Administrative expenses (187.1) (143.7)EBITDA 53.3 42.2Depreciation of property, plant and equipment (10.0) (5.9)Amortisation of intangible fixed assets (11.7) (11.3)Operating profit 31.6 25.0Net finance costs (3.1) (3.3)Datatec management fees (4.5) (2.8)Revaluation of minority interest buy-out liability (13.5) (10.4)Profit before tax 10.5 8.5Tax on profit on ordinary activities (7.3) (4.9)Profit for the year for continuing operations 3.2 3.6Loss from discontinued operations (2.3) (0.1)Profit for the year 0.9 3.5Balance sheet – unaudited 2011 2010 US$m US$mGoodwill and other intangible assets 166.7 154.0Property, plant and equipment 38.9 29.4Deferred tax asset 18.9 12.8Total non-current assets 224.5 196.2Inventories 28.8 33.7Trade and other receivables 292.5 254.8Cash and cash equivalents 93.6 82.8Total current assets 414.9 371.3Total assets 639.4 567.5Trade and other payables (325.8) (299.1)Bank overdrafts and loans (22.2) (6.1)Deferred consideration on acquisition of subsidiaries (7.0) (14.2)Total current liabilities (355.0) (319.4)Net current assets 59.9 51.9Amounts owed to holding company and fellow subsidiaries (38.3) (47.1)Obligations under finance leases (11.2) (5.5)Liability for minority interest buy-out (46.1) (32.6)Deferred tax liabilities (20.5) (13.2)Other long-term liabilities (13.2) (7.8)Total non-current liabilities (129.3) (106.2)Total liabilities (484.3) (425.6)Net assets 155.1 141.9Share capital and share premium 130.2 130.2Minority interest buy-out reserve (46.1) (32.6)Foreign currency exchange and other non-distributable reserves (23.3) (35.4)Retained earnings 63.4 52.7Attributable to equity holders of the parent 124.2 114.9Minority interest 30.9 27.0Total equity 155.1 141.9
Our subsidiariesLogicalisAnnual Review 201129 Percentage heldStatutory name Country of incorporation 2011 2010Holding CompanyLogicalis Group Limited England and Wales 100% 100%Subsidiaries of Logicalis Group LimitedLogicalis Group Services Limited England and Wales 100% 100%Logicalis UK Limited England and Wales 100% 100%Promon-Logicalis Latin America Limited England and Wales 70% 70%Logicalis Limited (dormant) England and Wales 100% 100%Logical Group Limited (dormant) England and Wales 100% 100%Satelcom Limited (dormant) England and Wales 100% 100%Logicalis Computing Solutions Limited (dormant) England and Wales 100% 100%Hawke Systems Limited (dormant) England and Wales 100% 100%T.B.C. Group Limited (dormant) England and Wales 100% 100%TBC Limited (dormant)* England and Wales 100% 100%Logicalis Computing Solutions Finance Limited (dormant)* England and Wales 100% 100%Direct Visual Group Limited (dormant)* England and Wales 100% N/ADirect Visual Limited* England and Wales 100% N/ADirect Visual Services Limited (dormant)* England and Wales 100% N/ANext Generation Internet Limited (dormant)* England and Wales 100% N/ALogicalis (Ireland) Limited Ireland 100% 100%Logicalis GmbH* Germany 100% 100%Logicalis Deutschland GmbH Germany 100% 100%Logicalis Networks GmbH* Germany 100% 100%Logicalis (US) Holdings, Inc. USA 100% 100%Logicalis, Inc.* USA 100% 100%Logicalis South America, Inc.* USA 70% 70%Network Infrastructure Corporation* USA 100% N/APromonLogicalis Tecnologia e Participacoes Ltda* Brazil 70% 70%PTLS Comercio, Exportacao e Importacao de Equipamentos de Telecommunicacao Ltda* Brazil 70% 70%PLLAL International LLC* Brazil 70% 70%Logicalis Brasil Servicos de Assessoria Tecnica Ltda.* Brazil 70% 70%Logicalis Argentina S.A.* Argentina 70% 70%X-Net Cuyo S.A.* Argentina N/A 70%Logicalis Uruguay S.A.* Uruguay 70% 70%Logicalis Inc. S.A.* Uruguay 70% 70%Logicalis Paraguay S.A.* Paraguay 70% 70%Logicalis Chile S.A.* Chile 70% 70%Logicalis Andina S.A.C.* Peru 70% 70%Logicalis Andina Bolivia LAB. Ltda.* Bolivia 70% N/ALogicalis Colombia S.A.S.* Colombia 70% N/ALogicalis Ecuador S.A.* Ecuador 70% N/ANetStar Group Holding Limited British Virgin Islands 100% 100%NetStar Australia Holding (BVI) Limited (dormant)* British Virgin Islands 100% 100%NetStar Asia Holding (BVI) Limited (dormant)* British Virgin Islands 100% 100%Logicalis Australia Pty Limited* Australia 100% 100%Logicalis Asia Pacific MSC Sdh Bdn* Malaysia 100% 100%Logicalis Malaysia Sdn Bhd* Malaysia 100% 100%Logicalis Singapore Pte Limited* Singapore 100% 100%Logicalis Shanghai Limited* China 100% 100%Logicalis Xiamen Limited* China 100% 100%Logicalis Hong Kong Limited* Hong Kong 100% 100%Note: * indicates a subsidiary which is owned indirectly via an intermediate holding company.
AddressLogicalis Group110 Buckingham AvenueSloughBerkshireSL1 4PFVisitwww.logicalis.comCall+44 (0)1753 777200This brochure has been printed in the UK, our printers areEnvironmental Management System ISO 14001 accreditedand Forest Stewardship Council (FSC) chain of custody certified.All inks are vegetable based.Designed and produced by The College www.thecollege.uk.com